China Rapid Finance Limited (NYSE: XRF), one of China’s largest consumer lending marketplaces, announced on Friday changes in its business operations and to its board of directors. The lender revealed that it has acknowledged its inability to file its annual report on Form 20-F in a timely manner and noted the receipt of notices from the New York Stock Exchange, and it is not in compliance with the NYSE’s continued listing standard with respect to both the minimum average share price and its failure to timely file the annual report. China Rapid Finance reported:
“Chinese regulators have instructed P2P platforms nationwide to implement “triple reduction,” which includes (i) reducing outstanding loan balances, (ii) reducing the number of lenders, and (iii) reducing the number of borrowers. The Company recently received a notice requesting changes to the Company’s business practices in order to be in full compliance with regulatory requirements set forth in Circular 175. These events may have a negative impact on the company’s financial performance. As a result of these developments, fewer new lenders are joining the Company’s marketplace platform than are exiting.”
China Rapid Finance also explained it will continue to operate its marketplace lending platform and will concentrate on institutions as the primary funding source. The lender further shared:
“Going forward, the Company plans to focus on facilitating loans through its micro credit company and continue to market its decision science software to banks and other credit intermediaries. The Company is also evaluating certain strategic opportunities and fund-raising options for the future of its business, in light of the current regulatory environment. Russell Krauss, Vice-Chairman and Co-CEO of the Company has transitioned his day-to-day responsibilities to focus on strategic alternatives for the Company.”
China Rapid Finance noted effective April 12, 2019, the Board has appointed Edward Yan as an independent director and Chair of the Audit Committee and has also appointed Chief Financial Officer Steven Foo to the Board as an executive director. Zhou Ji‘an resigned from the Board for personal reasons effective April 29, 2019. In regards to its filings, the lender added:
“On April 30, 2019, the Company filed a Form 12b-25 to extend the deadline for the timely filing of the Annual Report. The Company has been unable to file the Annual Report by the extended deadline of May 15, 2019, and is therefore not in compliance with the continued listing requirements under the timely filing criteria established in Section 802.01E of the NYSE Listed Company Manual. On May 16, 2019, the Company received a notice from the NYSE noting such non-compliance.”
